Central banks around the world are faced with a crucial, perhaps fateful, question: Where does the future of money lie? If one believes observers, the answer is long known. Some see the monetary authorities long since replaced by Crypto Code. So these days more and more monetary watchdogs are embarking on a journey into the digital world, which often appears like a never-ending odyssey in all discussions and experiments from outside.
Lebanon’s CBDC: Just a Desperate Try?
With its digital yuan, the People’s Republic of China casts a spell over one central bank. It almost seems as if the Middle Kingdom is driving the central bankers around the world. The next monetary authority that now wants to catch up with China’s advance is the currency watchdog of Lebanon . As the latest report from the national news agency in recent days shows, the country plans to launch its digital central bank currency as early as 2021. Last but not least, this also seems to be an attempt to get the inflation of the domestic pound into the grill.
ECB boss Lagarde sees the digital euro in the starting blocks
Meanwhile, the President of the European Central Bank Christine Lagarde caused a stir last week. Because in a virtual panel discussionWith her colleagues from the British Bank of England and the US Federal Reserve, Europe’s top currency guardian was unexpectedly optimistic: she expects the introduction of a digital euro in two to four years. In doing so, however, the Frenchwoman also repeated the mantra of the highest European financial institution. Accordingly, a digital euro should not be a substitute for cash. Her discussion partner, Fed chairman Jerome Powell, countered that it was necessary to wait and see and continue researching the potential of CBDCs. However, Lagarde received support from British central banker Andrew Bailey, who in turn emphasized that CBDCs could be an answer to private stable coins.
UK Treasury wants to regulate stable coins
The British Treasury Department had previously announced in a press release that the United Kingdom wanted to test this potential for its own currencyunderlined. It says that together with the Bank of England they want to examine the possibilities of a digital pound. However, when it presented future regulatory initiatives, the agency also addressed private stable coins in addition to CBDCs. The often controversial currency projects received high praise from Finance Minister Rishi Sunak. In his view, stable coins could “transform the way people manage and exchange money, making payments cheaper and faster”. At the same time, however, providers would have to adhere to the same minimum standards as companies that work with other means of payment. Legal answers should follow.
Norway waves it aside: „don’t need a CBDC“
Meanwhile, the Norwegian central bank has rejected government coin experiments. Ida Wolden Bache, the deputy head of the authority, recently emphasized that Norway is investigating the possibilities and potential of CBDCs. However, one simply does not need one’s own digital currency at the moment: „The lack of urgency reflects our previous view that there is no acute need to introduce a CBDC.“ However, this situation could change in the future. Therefore, structural changes in the banking system and state control of the payment infrastructure are still required.